In Md. electric market, deregulation works

February 12, 2011

In the past week, both Sun columnist Jay Hancock and state Senator James Rosapepe have used a deeply flawed premise to argue for a return to the days when Maryland consumers were captive to a monopoly utility ("Misleading electric ads make case for reregulation," Feb. 6 and "Deregulation has made electricity less reliable," Feb. 7). Both fail to recognize the harm this would cause to the consumers they seek to protect.

Approximately 179,800 residential customers of the state's largest utility are paying less for electricity, thanks largely to the significant savings offered by competitive energy marketers. This is exactly the outcome lawmakers intended when they opened the electricity market to competition.

Unfortunately Mr. Hancock argues that the competitive energy market should be shut down — and these savings forfeited — in order to protect consumers from the alleged behavior of an isolated few energy marketers.

A more sensible remedy already exists. The Maryland Public Service Commission (PSC) has extensive regulations in place to protect consumers against the alleged fraudulent practices and has established clear rules for electric suppliers to follow. The commission also has the authority to suspend the supplier's license and put them out of business, if warranted. In fact, the PSC is moving to protect consumers, as it should.

Similarly, Senator Rosapepe mistakenly blames the competitive market for a perceived decline in electric reliability and argues that putting regulators back in control is the answer. This argument fails on two counts. First, the part of the energy business that delivers electricity over power lines — and keeps the lights on — remains fully regulated and under supervision of the PSC. The PSC has extensive tools in place to ensure that utilities make the investments necessary to serve customers safely and reliably. Secondly, energy suppliers — the part of the business that is competitive — have clearly demonstrated they are capable of serving consumers. The growing volume of consumers and businesses shopping for electricity is evidence that this power is available at competitive prices.

Denying Maryland's energy consumers the right to shop for lower prices is not the answer. To quote Mr. Hancock, "Markets only work with good information." That's why the Retail Energy Supply Association (RESA) continues to urge the PSC to conduct a robust public education campaign to ensure consumers have the tools needed to be smart shoppers. We also support Sen. Catherine Pugh's legislation (Senate Bill 244), which requires additional education efforts by the PSC. Beyond a vigilant PSC, education is the best consumer protection available.

Becky Merola

The writer is the Maryland chairwoman of the Retail Energy Supply Association.

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